OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE

3500 DEFENSE PENTAGON

WASHINGTON, DC 20301-3500

SUSTAINMENT 

MEMORANDUM FOR SUPPLY DISCREPANCY REPORTING PROCESS REVIEW

COMMITTEE

 

SUBJECT: Approved Defense Logistics Management Standards Change 1411, Discontinue

Credit/Replacement for Constructed Document Numbers

The attached Approved Defense Logistics Management Standards Change (ADC), as 

outlined in the attachment, is approved for implementation.

Addressees may direct questions to Ben Breen, e-mail: Benjamin.Breen@dla.mil. Others 

must contact their designated Process Review Committee representative available at 

http://www.dla.mil/HQ/InformationOperations/DLMS/allpoc/. 

 

Leigh E. Method, SES 

Deputy Assistant Secretary of Defense

 for Logistics

Attachment:

As stated

cc: 

OUSD(C)

DLA J6DS
Attachment, ADC 1411

Page 1

ADC 1411

Discontinue Credit/Replacement for Constructed Document Numbers

1. ORIGINATING SERVICE/AGENCY AND POC INFORMATION:

a. Technical POC: DLA Enterprise Business System (EBS): Defense Logistics 

Agency, Logistics Operations, Makeya Porter, e-mail: Makeya.Porter@dla.mil, 571-767-4504

b. Functional POC: Defense Logistics Agency, Logistics Operations, Steven Nace, 

e- mail: Steven.Nace@dla.mil, 571-767-6582

c. Functional POC: Defense Logistics Agency, Finance, Justin Morrison, email: 

Justin.Morrison@dla.mil, 614-692-8858

2. REFERENCES:

a. DLM 4000.25, Volume 1, Concepts and Procedures, May 04, 2018

b. DLM 4000.25, Volume 2, Supply Standards and Procedures, October 09, 2018

c. DLM 4000.25, Volume 4, Military Standard Billing System – Finance, December 14, 

2016

3. APPROVED CHANGE(S): Changes from the proposed to approved change are identified 

in green shade text.

a. Brief Overview of Change: 

(1) Re-emphasize the systemic need to provide a constructed document number

for submission of Supply Discrepancy Reports (SDRs) and Product Quality Deficiency Reports 

(PQDRs) when the original document number cannot be located.

(2) Eliminates the practice of providing credit or replacement of materiel when 

referencing a constructed document number in place of the original document number for SDRs 

and PQDRs.

b. Background: During internal evaluations of credit processes for SDRs and PQDRs, 

DLA, Navy operations, and finance personnel discovered audit issues with issuing credit, and 

returning credit, when referencing constructed document numbers. When constructed document 

numbers are used to issue credit, and the original document number is not provided, when 

Defense Finance and Accounting (DFAS) processes the credit back to the customer, the 

customer’s comptroller office cannot match the return of funds to an original document number 

which results in unmatched transactions. OUSD(A&S) and OUSD(C) advised these audit 

findings discovered by DLA and the Navy are non-compliant financial processes.

c. Multiple references in the DLM 4000.25 (References 2.a., 2.b., and 2.c.) require the 

use of a constructed document number when the original document number cannot be located. 
Attachment, ADC 1411

Page 2

While both SDR and PQDR systemic business rules require requisition information be provided 

as part of the mandatory data elements transferred for these types of discrepancy reports, the 

practice of providing financial credit or replacements has been found to be non-compliant with 

Financial Improvement and Audit Readiness (FIAR).

d. Approved Change in Detail: When customers only submit supply or product quality 

reports with a constructed document number, the action activity will inform the submitting 

activity that credit or replacement will not be provided without the original document number

prior to providing disposition. The inability to provide an original document number will not be 

a determining factor for investigating or resolving supply or product quality related reports.

e. Revisions to Defense Logistics Manuals: Revises the below volumes and chapters 

of the DLM 4000.25 as referenced in Section 3. above, with specific changes provided in the 

enclosure.

(1) Defense Logistics Manual (DLM) 4000.25, Volume 2, Supply Standards and 

Procedures, Chapter 11, Materiel Returns, Redistribution of Assets, Directed 

Discrepant/Deficient Materiel Returns and Retrograde Returns

(2) Defense Logistics Manual (DLM) 4000.25, Volume 2, Supply Standards and 

Procedures, Chapter 17, Supply Discrepancy Reporting

(3) Defense Logistics Manual (DLM) 4000.25, Volume 2, Supply Standards and 

Procedures, Chapter 21, Stock Readiness Program

(4) Defense Logistics Manual (DLM) 4000.25, Volume 2, Supply Standards and 

Procedures, Appendix 6.39, Preparation of Supply Discrepancy Report Using Standard Form SF 

364

(5) Defense Logistics Manual (DLM) 4000.25, Volume 4, Military Standard 

Billing System – Finance, Chapter 4, Adjustment Procedures

f. Approved Transaction Flow: Standard SDR/PQDR process applies.

4. REASON FOR CHANGE: This change is necessary to meet financial audit standards and 

to bring DoD logistics and financial processes into compliance.

5. ADVANTAGES AND DISADVANTAGES:

a. Advantages: No longer allowing credit or replacement when referencing a 

constructed document number will resolve audit issues discovered during reviews by 

OUSD(A&S), OUSD(C), Navy, and DLA. Achieving sustained audit compliance is a top 

priority of the DoD.

b. Disadvantages: Discontinuing to process materiel credits or replacements when

referencing constructed document numbers could result in fewer reports of non-conformance 

with no direct compensation being provided to reporting units.
Attachment, ADC 1411

Page 3

6. ESTIMATED TIMELINE/IMPLEMENTATION TARGET: No systemic modifications 

are required as part of this change. The change will be implemented upon approval of this 

DLMS change.

7. IMPACT: 

a. New/Changes Data Elements: No changes required.

b. Automated Information Systems (AIS): No AIS impact

c. Defense Automatic Addressing System (DAAS): No DAAS impact

d. Non-DLM Publications: Components to update internal procedures upon approval.

8. PROPOSED DLMS CHANGE (PDC) 1411 RESPONSE/COMMENT RESOLUTION:

Component Response/Comment Disposition

1. DLA Concur with comment.

Comment:

1. We 100% agree with the concept of not providing credit if 

the materiel was not purchased from DLA.

2. Add the following to paragraph C21.4.9.1. for clarity. 

"...issued by the Source of Supply (SOS)". This meets the 

intent for the SOS to only provide credit on items purchased 

from the SOS

As noted 

DEDSO Response:

Update made to approved 

change to DLM 4000.25 

Volume 2 Chapter 21, 

paragraph C21.4.9.1. as 

recommended for clarity.

2. Navy Concur without comment. As noted.

3. Air Force Concur with comment.

Comment:

1. C17.3.2.11.2.: Sentence states that when using a constructed 

DocNR in an SDR, coordinate with the Component Finance 

Office. Recommend deleting the sentence as there will no 

longer be a financial transaction required to recoup funds.

Rationale: Credit is no longer going to occur, so there is no 

real purpose to coordinate with the Component Finance Office, 

unless to notify that a constructed DocNR was used.

2. C17.3.2.11.2.: A number of sentences were deleted that 

were directly applicable to crediting an SDR with a 

constructed document number. However, the last sentence, 

"Include identity of the incorrect item received in the 

discrepancy report" does not apply to crediting. Keep this 

sentence.

Rationale: You would want to include the identity of the 

incorrect item in an SDR. Whether you credit or not, this 

sentence is still applicable.

As noted.

DEDSO Response:

1. Updated. 

2. Updated. 
Attachment, ADC 1411

Page 4

Component Response/Comment Disposition

3 C21.4.9.1.: The new sentences, " when using a constructed 

document number, the original document number must be

included to receive credit. Failing to provide the original 

document number will result in no credit to the Component 

performing the return." makes no sense. What would be the 

reason to use a constructed document number if the original 

document number is known? Recommend change to: "When 

using a constructed document number, credit or replacement 

will not be given to the Component performing the return."

Rationale: The prior sentence states "if the owner no longer 

knows the specific document number...". Why would we state 

you have to include the original doc number in the next 

sentence if you already have confirmed you don't know what it 

is?

4. Item 13, para 2: Same comment as previously, why would 

we coordinate with the Component Finance office if using a 

constructed document number? Since credit is no longer given, 

it appears as if this coordination is no longer needed unless to 

notify finance that they should not process a credit. 

Recommend changing to: "When using a constructed 

document number under the authorized procedures, assign 

DLMS Utilization Code U in the first position of the serial 

number in the constructed document number. Also note that 

when using a constructed document number, credit or 

replacement is not authorized."

Rationale: Since financial data will not be provided in the 

SDR, the Component Finance Office would not be able to 

process a credit.

5. C17.3.2.11.2.: Previous correction deleted the "creditto/bill-to" DoDAAC (credit nor billing is processed now). 

Recommend the same correction...delete "credit to/bill to" and 

replace with "reporting activity" DoDAAC.

Rationale: To be consistent

3. Updated to include DLAs 

comments in this section as 

well. 

4. Updated. 

5. Updated.

4. US Army Concur without comments. As noted.

5. USMC Concur without comments. As noted. 

6. DAAS Concur without Comment. As noted.

7. USTRANS

COM

Abstains. As noted.

8. GSA Concur without Comment. As noted.

9. OUSD(C), 

EDBP

Concurs as written. As noted.
Enclosure, ADC 1411

Page 1

Enclosure

Make the following changes to Defense Logistics Manual (DLM) 4000.25. Additions are shown 

in red bold italics, and deletions are shown with double strikethrough text.

A. Defense Logistics Manual (DLM) 4000.25, Volume 2, Supply Standards and Procedures

Chapter 11, Materiel Returns, Redistribution of Assets, Directed Discrepancy/ Deficient 

Materiel Returns and Retrograde Returns

(Preceding text not shown)

C11.20.3.2. Product Quality Deficiencyscrepancy Report

C11.20.3.2.1. When directing return of deficient materiel/exhibits to 

storage activities, the PQDR reply will include the date by which the customer will return 

the materiel to the designated location. The responsible activity may apply an 

expedited time standard to Type I PQDRs or as appropriate. The ICP/IMM will identify 

the return-to location will be identified by DoDAAC or CAGE/clear text as described in 

paragraph C11.20.1.

C11.20.3.2.2. When directing return of deficient materiel/PQDR exhibit, 

the ICP/IMM will establish a due-in and generate a PMR transaction to the receiving 

activity for the materiel return/exhibit quantity using SCC Q. Action to establish the duein and create the PMR transaction will be accomplished under MILSTRAP/DLMS by the 

activity directing the return. The PMR will perpetuate the document number associated 

with the PQDR, normally the document number of the original shipment or the 

alternative document number assigned by the activity directing the return as described 

in paragraph C11.20.1. If the submitter does not have the original shipment document 

number available, a constructed document number will be employed for the PMR, and

the return shipment, and future financial actions. The DLMS PMR will include the Return 

Type Code indicating the reason for the PMR as return of quality deficient materiel and 

will perpetuate the PQDR report control number (RCN).

Chapter 17, Supply Discrepancy Reporting

(Intervening text not shown)

C17.3.2.6.2. Concealed Overage/Shortage. U.S. Government 

customers must report overages or shortages discovered while opening a sealed 

vendor pack regardless of dollar value or shipper. These reports must contain, if 

available, the PIID from the packaging, the lot number, and original document number. 

A constructed document number must be provided when the original number is not 

known. When using a constructed document number in an SDR coordinate with the 

applicable Component finance office. Use the credit-to/bill-to reporting activity’s

DoDAAC as the basis for constructing the document number, follow MILSBILLS 

procedures citing Code U in the first position of the constructed document number serial 

number (DLMS Utilization Code U), and include fund code to ensure that credit/billing is 
Enclosure, ADC 1411

Page 2

appropriate. Conformance with standard line of accounting (SLOA)/accounting 

classification requires any initiation of a financial business event (e.g., credit or debit) to 

include SLOA mandated standard financial information system (SFIS) elements.7 The 

DLMS SDR transaction support inclusion of SLOA required elements.

(Intervening text not shown)

C17.3.2.6.5.1. Overages or shortages of boxes, packages, or loose 

articles of freight in a commercial/Government-owned/leased shipping container 

(commonly called SEAVAN), Military SEAVAN (MILVAN), a Military Sealift Command 

SEAVAN (MSCVAN or MILVAN), roll-on/roll-off (RORO) trailer, or CONEX. 

(Intervening text not shown)

C17.3.2.11.2. Incorrect item discrepancies discovered while opening a 

sealed vendor pack will be reported regardless of dollar value or shipper. These reports 

must contain the PIID from the packaging and, if available, the lot number and the 

original document number. A constructed document number will be provided when the 

original number is not known. When using a constructed document number in an SDR 

coordinate with the applicable Component finance office. Use the credit-to/bill-to

reporting activity’s DoDAAC as the basis for constructing the document number, 

follow MILSBILLS procedures citing Code U in the first position of the constructed 

document number serial number (DLMS Utilization Code U), and include fund code to 

ensure that credit/billing is appropriate. Conformance with standard line of accounting 

(SLOA)/accounting classification requires any initiation of a financial business event 

(e.g., credit or debit) to include SLOA mandated standard financial information system 

(SFIS) elements.8 The DLMS SDR transaction supports inclusion of SLOA required 

elements. Include identity of the incorrect item received in the discrepancy report.

(Intervening text not shown)

C17.3.20.1.2.7. If the SDRs contain a constructed document number, 

check if fund code is invalid/missing. If fund code is invalid/missing, reject with the 

DLMS 842A/R SDR Reply citing Reply Code 943.43

Chapter 21 Stock Readiness

(Preceding text not shown)

C21.4.9.1. Upon completion of the investigation, if the suspended materiel is 

found to be non-conforming, the manager will provide an interim SQCR response to the 

owner(s) using Reply Code 523104 requesting original requisition numbers and asking 

the owner to create a ship-in-place MRO to the distribution center(s) where the materiel 

is located using the manager-provided document number. Concurrent with the SQCR 

interim reply, the manager will provide a prepositioned materiel receipt (PMR) to the 

applicable distribution center(s) identifying the manager as the activity to which the 

receipt transferring ownership will be directed. If the owner no longer knows the specific 

document number under which the materiel was requisitioned, a constructed document 
Enclosure, ADC 1411

Page 3

number may must be used. Failing to provide the original document number for 

material issued by the source of supply (SOS) will result in no credit to the 

Component performing the return when using a constructed document number. is 

provided, Standard Line of Accounting (SLOA)/Accounting Classification data content 

may be populated manually or referentially through the authoritative data source SFIS 

Fund Code to Fund Account Conversion Table maintained at DAAS.

C21.4.9.2. Standard Line of Accounting/Accounting Classification Data 

Elements. Under DLMS, logistics transactions with financial implications are required to 

carry discrete SLOA/Accounting Classification data elements. This requirement does 

not applyies to the SQCR Reply where the original SLOA/Accounting Classification 

data was not previously provided as indicated by the use of a constructed document 

number by the non-manager owner requesting credit for suspended stock. Pending full 

implementation of SLOA/Accounting Classification across DoD logistics processes, 

WebSQCR will be responsible for populating the data elements available from the 

Standard Financial Information Structure (SFIS) Fund Code to Fund Account 

Conversion Table. The remaining SLOA/Accounting data elements identified in the 

SQCR Reply transaction will not be available for initial implementation of WebSQCR.

When a constructed document number is provided in the owner’s SQCR reply, 

WebSQCR will match to the table to extract the following data elements based upon 

Service/Agency Code (in the first position of the document number DoDAAC 

representing the credit-to DoDAAC) and Fund Code:

• Department Regular Code

• Department Transfer Code

• Main Account Code

• Sub-Account Code

• Treasury Sub Class

• Sub-Allocation

• Availability Type Code

• Beginning Period of Availability/Program Year. If Availability Type Code X 

(no year funds) is identified in the SFIS Fund Code to Fund Account 

Conversion Table for the line of accounting, then the date provided will be 

interpreted as the Program Year and the Ending Period of Available will 

not apply.

• Ending Period of Availability. Not applicable if Availability Type Code X is 

identified (refer to Beginning Period of Availability above)
Enclosure, ADC 1411

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Appendix 6.39, Preparation of Supply Discrepancy Report Using Standard Form 

(SF) 364

(Preceding text not shown)

Item 8 Requisitioner's Number. Enter the requisitioning activity's number,

(e.g., requisition, purchase request, and suffix code), if applicable.

Entry of the applicable requisition document number is mandatory in all

instances, even though a contract/purchase order is involved. Only one

document number will be included on each SF 364. For U.S. SDRs

only, when the original requisition number cannot be identified for

discrepancies in sealed vendor packs, the reporting activity must

include a constructed document number. When using a constructed

document number in an SDR, use block 13 to cite the fund code and

bill-to/credit-to DoDAAC, if different from that in the document number

credit or replacement is not authorized.

Item 9a NSN/Part Number and Nomenclature. If item received is different from

item shown on shipping documents, or different from item ordered,

show each item on a separate line. For serial numbered principal

items, sets, kits and outfits, list the item individual serial number first,

followed by the discrepancies applicable to that serial number. (Sets,

kits and outfits showing an assembly order number, the assembly order 

number should also be listed.)

Item 13 Funding and Accounting Data. (Not applicable to Security Assistance 

SDRs.) For packaging discrepancies, the accounting/appropriation 

fund cite may be entered in this block by the SDR initiator if 

reimbursement funds/credits are expected for costs incurred to correct 

reported deficiencies. Use only when a billing document such as the SF 

1080, Voucher for Transfer Between Appropriation and/or Funds, will 

not be prepared.

When using a constructed document number under authorized 

SDR procedures use the reporting activity’s DoDAAC as the basis 

for constructing the document number, citing and prior coordination 

with the applicable Component finance office (Code U in the first 

position of the constructed document number serial number (DLMS 

Utilization Code U). per MILSBILLS procedures), include fund code and 

credit-to/bill-to DoDAAC, to ensure that credit/billing is appropriate. 

Credit or replacement is not authorized.
Enclosure, ADC 1411

Page 5

B. Volume 4, Military Standard Billing System – Finance 

Chapter 4, Adjustment Procedures

(Preceding text not shown)

C4.10. ADJUSTMENTS FOR DISCREPANCY REPORTS

(Intervening text not shown

C4.10.1.2.2. Materiel Billed and Paid. The materiel was billed and paid 

previously or iIn the case of reporting on a constructed document number, there is a 

reasonable basis for assuming that the items were previously billed and paid credit will 

not be authorized per Volume 2 C17.3.2.6.5.1 and C21.4.9.1.

(Intervening text not shown

C4.10.1.4. The original MILSTRIP requisition number is included on the 

PQDR, SDR, or SQCR. When the original requisition number cannot be identified, the 

originator, material owner, or screening point must include a constructed 14 position 

MILSTRIP document number using the originator, owning activity, or screening point’s 

DoDAAC for the first six characters, the current Julian date (YDDD) for the next four 

positions, and a four position serial number beginning with “U” as the first position of the 

serial number. An example of a constructed document number is F123453175 U001. 

Code U is also carried as a utilization code under DLMS. Note: For SDRs, 

circumstances authorizing the use of a constructed document number are restricted to 

those described in DLMS, Volume 2, Chapter 17. For SQCRs, circumstances 

authorizing the use of a constructed document number are restricted to those 

descripted in DLMS, Volume 2, Chapter 21. Credit or replacement is not authorized 

for constructed document numbers.

C4.10.2.4. Adjustments based upon PQDRs will be forwarded to the code 

and bill-to DoDAAC indicated on the PQDR. If omitted, adjustments will be sent to the 

DoDAAC indicated (TAC 3, or TAC 1 if no TAC 3 exists) of the requisition number 

provided on the PQDR and the fund codes in Table C4.T2.